Full Judgment
R.C. Lahoti, J.
1. On 29th August, 1996, an order of adjudication under the provisions of the Central Excise Act, 1944 was passed against the petitioner resulting into raising a demand of Rs. 81,68,304/- on account of duty, and Rs. 35 lacs on account of fine with a penalty of Rs. 35,04,000/-. The petitioner sought for waiver of pre-deposit and stay of the recovery. On 14th February, 1997, the Tribunal passed an order under Section 35-F of the Act, directing the amount of Rs. 50 lacs be deposited within a period of three months and subject to such deposit the recovery of balance to remain stayed during the appeal.
2. On 27th May, 1997, the petitioner pre-deposited Rs. 50 lacs in compliance with the above said order dated 14th February, 1997.
3. The appeal was finally heard and decided on 4th March, 1998. It appears that the petitioner had produced in evidence voluminuous technical literature. The Tribunal formed an opinion that in order to effectively adjudicate upon the issue arising for decision, the technical literature was required to be taken into consideration. At the same time, it also formed an opinion that the Tribunal was not an appropriate forum for considering the same and the matter needed to be remanded to the adjudicating authority for deciding the issue afresh in the light of the technical literature made available by the petitioner. Consequently, the appeal was allowed and the matter was remanded to the adjudicating authority for passing a fresh order of adjudication after taking into consideration the technical literature produced by the petitioner as also certain circulars issued by the Central Board of Excise and Customs.
4. When the order of remand was passed, the learned counsel for the petitioner made a prayer for the amount of pre-deposit being refunded. The prayer was refused. (5). Feeling aggrieved by the order of the CEGAT refusing to refund the amount of pre-deposit, the petitioner has come up to this court invoking its jurisdiction under Article 226 and 227 of the Constitution.
6. The learned senior counsel for the petitioner has submitted that once an order of adjudication resulting into a demand forming subject matter of appeal was set aside, there was no occasion for withholding the amount deposited pursuant to the order of adjudication which had ceased to exist. The learned standing counsel for the respondents has opposed the prayer made by the petitioner, submitting that there is no specific power to make an order of remand conferred on the CEGAT. It has to be taken as an inherent power conferred on an Appellate Tribunal and there is nothing wrong if while exercising such a power to make a remand, the Tribunal chooses to qualify it by conditions without which the order of remand itself would not have been made. We have specifically asked the learned counsel for the respondents if there is any statutory power or any principle of law conferring the Tribunal with such jurisdiction None has been brought to our notice excepting what was already contended and noted hereinabove.
7. It cannot be denied that the demand against the petitioner was raised consequent to the order of adjudication. Section 35-F of the Act under which the petitioner was required to deposit the amount of Rs. 50 lacs speaks of 'deposit pending appeal'. It is clear that the amount so deposited remains a deposit pending appeal and is thereafter available for appropriation or disbursal consistently with the final order maintaining or setting aside the order of adjudication.
8. In this case, the matter has been remanded in as much as the Tribunal was of the opinion that the adjudication was not satisfactory and it required a fresh application of mind. In our opinion, once the order of adjudication was set aside, the Tribunal could not have ordered the amount of pre-deposit to be retained awaiting the order of adjudication. There is no provision in the law requiring certain amount to be retained as a predeposit pending finalisation of the adjudication proceedings. As the amount is being withheld without any authority of law, it is liable to be refunded.
9. For the foregoing reasons, the petition is allowed. The impugned order of the Appellate Tribunal in so far as it directs the amount of pre-deposit not to be refunded and to be retained until a fresh order of adjudication is passed, is set aside. It is directed that the amount shall be refunded to the petitioner within a period of four weeks from today. No order as to costs.